Traders and investors are rapidly cutting exposure to the London Metal Exchange after this month’s nickel-market chaos, driving open interest to a 15-year low and leaving key metals exposed to wild price swings as liquidity shrivels.
The number of open positions across the LME’s six main metals fell more than 8% in the two weeks after the exchange suspended trading in nickel and canceled billions of dollars worth of transactions on March 8. Investors have queued up to unwind their nickel positions since the market reopened, and the chaos has spilled over into other markets too, with aluminum and zinc exposure dropping sharply.
There are signs that open interest will drop further as investors and traders head for the exit, putting a further strain on liquidity in the benchmark futures market for industrial metals. The turmoil in the nickel market has angered many investors and several — including both metals veterans and generalists — have said they are pulling back from the LME.
Was it market chaos, or did they see certain customers “being taken care of?”
If you know the game is fixed, a lot of smart gamblers will find a different game.
Most gamblers will continue gambling even when they know the game is rigged.
The Chinese company with the big shorts is being given special treatment. Not functioning the way it is supposed to.
The spread between contract and physical gold is 4-5% – which is about normal.
The spread between contract and physical silver is about 33% – which is not.
It would certainly make sense to take delivery of the contract at these prices and sell the phys.
Ward, asking from a position of woeful ignorance, isn’t that playing into their hands? I was always under the impression that physical was far better than paper.
Yes agreed DB – I simply meant that if one was going to be trading metals – it makes sense to take delivery – and maybe it would stop the bullshit in the futures markets.
Even better to take delivery and keep it but not everyone can sit on 5000 oz of hard silver
Got it. Thx.
Maybe they moved to the lucrative pork belly and soy exchange. If you like chaos these are great times to be alive.
why did they save the Chinese bank that went the wrong way and got caught?
looks a lot like market manipulation
“In China, traders are unwinding positions they had built to bet on the arbitrage between the Shanghai and London markets, according to one Chinese metals trader, who said no-one he’s spoken to there is still trading LME nickel.”
yep, saving the chinese at the expense of the world
Why did they save the Chinese bank? Because the LME is owned by the Chinese. The LME is wholly owned by the Hong Kong Stock Exchange which is 60% owned by Hong Kong which is controlled by the Chinese government. And here I thought the British owned the LME. Silly me.
China be like…we can control it? The west is so fooked!
https://www.independent.co.uk/news/business/news/chinese-buy-london-metal-exchange-in-ps1-4bn-takeover-7855200.html
has anybody asked the TURDeau if he understands this?